another email from keith about the rig... it's basically what lowman's said, but a few more things. i didn't realize that there are still a lot more wells to be reworked that they didn't get to last year... only means more mula!
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What triggered this purchase is sort of real world oil patch problems vs pink sheet expectations. You know how pink sheet companies have a grocery list of reasons why things never get done or fail to meet schedules? We were very close to falling into that trap, because during the winter all the major companies drilling Coal Bed Methane wells a few miles south of us are monopolizing the work over rigs by putting them under exclusive year contracts and paying as much as 50% cash up front to the work over contractors. I cant blame the work over guys for taking such a sweet deal but... it was causing us problems, unacceptable problems. Hemi is the wrong company to do this too, we dont get mad we get competitive. We hired a crew away from a competitor, yup one of those rigs under a year contract, no longer has a crew to run the rig, we bought one of the largest (tonnage capacity) newer high speed semi automated (it can be ran remotely with joy sticks just like a remote control car/airplane) in SE Kansas... We want to keep the rig on the leases and do all our work in house for at least 6 months... we still have alot of wells to get online that we could not get to last year, we have wells that need to be drilled and complete and we may acquire some more leases in the future... now we have the tools and assurance we can get them online.
As we get things we currently have come online on our wells we will possibly acquire more wells/leases or maybe take on clients... the equipment shortage has gotten really bad in the past 6 months, contracts will not be hard to get.
Currently the smaller slower rigs are getting $140 to $160 an hour, so I suspect with a highly skilled crew, one of the largest and fastest work over rigs in SE KS we can possibly get $180 to $200 an hour... but primarily we did this for in house use, but there is no lack of demand, there are alot of operators who are in our former situation and cannot get a workover rig.
No this is not the rig on the film, the crews went through the manufacturers school and we had everything back in woodson county Friday night. We are currently getting the tools, debugging the rig... little odds and end (like replacing street tires with off road tires) just menial things needed to make sure when we get started we will not have down time or annoying .60 problems in the boon docks, we had it over a well today, with the first shake down.
Take Care
Keith A,
